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Value Based Payments for Physicians

H.R.2 – Medicare Access and CHIP Reauthorization Act of 2015 was passed by the House on March 26, 2015 and the Senate on April 14, 2015. While the title of the law indicates one of the topics of the bill (removing the sustainable growth rate (SGR) methodology from the determination of annual conversion factors in the formula for payment for physician services), the title is not representative of a major change that could affect all physicians. Under the Medicare Access and CHIP Reauthorization Act of 2015, the Secretary of Health and Human Services is directed to consolidate components of the three specified existing performance incentive programs into a new Merit-based Incentive Payment (MIP) system under which physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists, would receive annual payment increases or decreases based upon their performance as measured by standards the Secretary shall establish according to specified criteria.

Additionally, the Government Accountability Office (GAO) is directed to examine similarities and differences in the use of quality measures under the original Medicare Fee for Service program, Medicare Advantage Program, selected state medical assistance programs (Medicaid), and private payer arrangements and make recommendations on how to reduce the administrative burden on applying such measures.

The pace of changing from fee for service to value based payment models is likely to accelerate in the next coming 1 to 3 years. It is critical when considering an incentive payment structure to do two things – (1) review lessons learned and (2) complete a baseline assessment of your practice. Numerous lessons have been learned from Accountable Care Organization providers and providers who are participants in Value Based Programs. These lessons are critical to review before entering into incentive based programs. Additionally it is important to complete a baseline measurement for applicable quality measures and review possible methods of improvement prior to making a contractual commitment.

Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.

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